Tesla Has Bought $1.5 Billion in Bitcoin

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Tesla Inc said on Monday it had invested around $1.5 billion in bitcoin and expected to begin accepting payment for its cars and other products with it in the near future, prompting a more than 10% jump in the electronic currency.

Analysts said the move by one of the world’s best-known companies was liable to prove a game-changer for bitcoin.

In a filing with the Securities and Exchange Commission, the company said it bought the bitcoin for “more flexibility to further diversify and maximize returns on our cash.”

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Tesla also said it will start accepting payments in bitcoin in exchange for its products. That would make Tesla the first major automaker to accept do so. That would make Tesla the first major automaker to accept do so. The $1.5 billion worth of bitcoin will give Tesla liquidity in the cryptocurrency once it starts accepting it for payments.

A Bold Move made by Tesla

Tesla’s move into bitcoin represents an investment of a significant percentage of its cash in the investment. The company had more than $19 billion in cash and cash equivalents on hand at the end of 2020, according to its most recent filing.

Elon Musk said a week ago that bitcoin was “on the verge” of being more widely accepted among investors and in December asked if it was possible to do large transactions in the currency.

“I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move,” said Eric Turner, vice president of market intelligence at cryptocurrency research and data firm Messari.

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“One of the largest companies in the world now owns Bitcoin and by extension, every investor that owns Tesla (or even just an S&P 500 fund) has exposure to it as well.”

Bitcoin prices surged to new highs Monday following Tesla’s announcement, reaching a price of at least $44,200. Tesla shares were up more than 2% Monday morning. In its SEC filing, Tesla warned investors of the volatility of bitcoin’s price.

Two weeks ago, the billionaire Tesla owned added the hashtag #bitcoin to his Twitter bio, a move that helped to briefly push up the price of the cryptocurrency by as much as 20%. Two days later, he said on the social medial chat site Clubhouse: “I do at this point think bitcoin is a good thing, and I am a supporter of bitcoin.”

Elon Musk is well-known for making surprising moves and we might see some more game-changing moves from him.

 

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Harshit Bhasin
I’m a student currently doing B.A(hons) English from Dyal Singh College, Delhi University. I like to read and write and apart from it, I like watching movies, series, animated series (Animes) and playing games. I’m also a sportsperson and I like to perform outside activities regularly.

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